Germany–U.S. · Self-Employment
Self-Employment & Social Security Germany–U.S.
Which social-security system applies to self-employed individuals with activities in Germany and the United States? The Germany–U.S. Social Security Agreement prevents double coverage in many cases and can eliminate parallel German social-security contributions and U.S. Self-Employment Tax.
Totalization Agreement
Self-Employed Individuals Should Generally Be Covered by Only One System
The Germany–U.S. Social Security Agreement contains special rules for self-employed individuals. A person who carries out self-employment exclusively in the United States is generally assigned to the U.S. system. A person who carries out self-employment exclusively in Germany is generally assigned to the German system.
An important exception applies when an existing self-employment activity is temporarily transferred to the other country. If the transfer is expected to last no more than five years, the original social-security system can generally continue to apply.
The purpose is to prevent the same self-employment activity from being subject simultaneously to German social-security contributions and U.S. Self-Employment Tax.
Basic Rules
Three Common Situations
Activity Only in Germany
The self-employment activity is generally assigned to Germany. U.S. Self-Employment Tax can be excluded where the agreement applies correctly.
Activity Only in the United States
The self-employment activity is generally assigned to the U.S. system, and the applicable Self-Employment Tax rules apply.
Temporary Transfer
If an activity normally carried out in one country is temporarily transferred to the other for no more than five years, the original system can generally continue.
Temporary Activity
Home-Country Social-Security Coverage Can Continue for Up to Five Years
A person who normally carries out self-employment in Germany and temporarily transfers that activity to the United States generally remains subject to the German system if the agreement requirements are met and the U.S. activity is expected not to exceed five years.
The same principle applies in reverse where self-employment normally carried out in the United States is temporarily transferred to Germany.
- existing self-employment activity
- temporary transfer to the other country
- expected duration no more than five years
- home-country system can continue
- double contributions are intended to be avoided
- Certificate of Coverage required as evidence
More Than Five Years
For a Long-Term Transfer, the System of the New Work Country Generally Applies
More Than Five Years From the Beginning
If it is planned from the outset that the self-employment activity will be carried out in the United States for more than five years, U.S. law generally applies.
Extension During the Activity
If an initially shorter transfer is later extended, it should be reviewed in good time whether an exception agreement is required or appropriate.
Exception Agreement
The agreement allows the competent authorities of both countries to agree on a different coverage result in individual cases. There is no automatic right to such an exception.
New Five-Year Period
A new temporary transfer with a fresh five-year period does not generally begin after only a short interruption. Under the administrative rules, an interruption of more than twelve months is generally required.
D/USA 101
Evidence for Self-Employed Individuals Remaining Under German Law
If a self-employed person remains subject to the German system while working in the United States under the agreement, this is documented with D/USA 101. The certificate is particularly important to support exemption from parallel U.S. Social Security or Self-Employment Tax where the agreement applies.
Since 2026, applications for D/USA 101 for self-employed individuals are submitted electronically to the GKV-Spitzenverband, DVKA.
- D/USA 101 documents continued application of German law
- relevant for self-employment activity in the United States
- applications since 2026 are submitted electronically to the DVKA
- the nature and period of the activity must be stated
- retain the certificate with U.S. tax records
- reassess if the facts change
U.S. Self-Employment Tax
U.S. Federal Income Tax and U.S. Self-Employment Tax Are Two Different Taxes
U.S. Federal Income Tax
Income tax on self-employment profits depends on U.S. tax status, source of income, permanent-establishment rules and the income-tax treaty.
Self-Employment Tax
U.S. Self-Employment Tax funds Social Security and Medicare. Whether it applies in a cross-border case is affected by the Germany–U.S. Social Security Agreement.
U.S. Citizen in Germany
A U.S. citizen may still need to file a U.S. income-tax return even if the self-employment activity is assigned exclusively to the German social-security system and no U.S. Self-Employment Tax is due.
Certificate Rather Than Assumption
Exemption from U.S. Self-Employment Tax should be supported by the appropriate Certificate of Coverage and should not be assumed merely because the individual lives in Germany.
Germany
German Self-Employment Does Not Automatically Mean Full German Social-Security Contributions
The agreement assigns the activity to one social-security system. Which specific German branches and contribution obligations then actually apply is determined by German domestic social-security law.
Self-employed individuals in Germany are not automatically subject to compulsory coverage in all branches in the same way as employees. Depending on the activity, compulsory pension insurance, health and long-term-care insurance or professional pension schemes can apply differently.
The statement that “German law applies” must therefore be distinguished from the question of which specific German contributions are actually due under that law.
LLC, Sole Proprietorship & Structures
The Entity Structure Must Be Separated From the Individual Social-Security Analysis
U.S. Single-Member LLC
A U.S. SMLLC may be treated as a disregarded entity for U.S. tax purposes. For social-security purposes, the key question remains how and where the owner personally performs the activity.
German Sole Proprietorship
A person working in Germany as a sole proprietor for U.S. clients is not carrying out the activity in the United States merely because the customers are located there. Work location and entity structure must be analyzed separately.
U.S. Corporation / S Corporation
Where the activity is carried out through a corporation, the social-security analysis may differ from classic self-employment. Compensation arrangements and employment relationships require separate review.
German Partnership
Partners in a German partnership may be treated as self-employed depending on their role and structure. U.S. persons can also have additional U.S. tax and information-reporting obligations.
Activity in Both Countries
Regular Parallel Activity Is More Complex Than a Temporary Transfer
Temporarily Transferred in Full
The five-year rule is especially straightforward where an activity previously carried out in Germany is transferred fully or substantially to the United States for a limited period.
Permanently Active in Both Countries
A person who regularly and permanently carries out self-employment in both Germany and the United States should not automatically assume that the simple five-year rule applies. The exact coverage result must be determined from the specific pattern of activity.
Remote Services
The customer's location does not determine the physical place of work. Services for U.S. clients performed from Germany are generally activity carried out in Germany.
Business Trips
Individual activities in the United States can raise income-tax, permanent-establishment and state-tax issues in addition to social-security questions.
Totalization of Coverage Periods
German and U.S. Coverage Periods Can Later Be Combined for Pension Entitlement
The agreement does more than prevent double contributions. If an individual has coverage periods in both countries and does not meet the minimum eligibility requirements of one country based solely on that country's periods, certain periods from the other country can be taken into account for entitlement purposes.
Each country generally calculates and pays its own benefit. Totalization does not create a single combined Germany–U.S. pension.
- German and U.S. periods can be combined to satisfy minimum coverage requirements
- the U.S. side generally requires its own minimum credits for a totalization benefit
- Germany recognizes U.S. periods under the agreement rules
- each country pays its own share of the benefit
- today's coverage allocation can affect future pension rights
Typical Situations
Germany–U.S. Self-Employment in Practice
U.S. Citizen Lives and Works Self-Employed in Germany
U.S. Form 1040 may still be required. For social-security purposes, German law may apply and U.S. Self-Employment Tax may be excluded under the agreement.
German Freelancer With U.S. Clients
U.S. clients alone do not make the activity U.S. self-employment. The key question is where and how the services are actually performed.
Two Years of Activity in the United States
If an existing German self-employment activity is temporarily transferred, German social-security law can continue and D/USA 101 may be issued.
Six Years of Activity in the United States
If a period of more than five years is planned from the outset, U.S. rules generally apply; an exception agreement may be considered.
German Resident With a U.S. SMLLC
The LLC structure does not automatically determine the individual's social-security treatment. German, U.S. tax and agreement issues must be analyzed separately.
Permanent Activity in Germany and the U.S.
True ongoing multi-country self-employment can require an individual analysis of the agreement and, where necessary, coordination between the competent authorities.
Related Guidance
Related Topics
Frequently Asked Questions
Self-Employment & Social Security Germany–U.S.
Does a U.S. citizen who is self-employed in Germany always have to pay U.S. Self-Employment Tax?
How long can German coverage continue during temporary self-employment in the United States?
How does a self-employed individual apply for D/USA 101?
Does a short return to Germany automatically start a new five-year period?
Does a U.S. Single-Member LLC automatically change the social-security result?
Can German and U.S. coverage periods later be combined?
Germany–U.S. Tax & Social Security Advice
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